Micro-credit Companies Debt Financing Research In China

In the economic system of every mature developed country, small and medium-sized enterprises have already become the important roles. And in China, with the rapid growth of the national economy, small and medium-sized enterprises also play an increasingly important role. They are irreplaceable. Micro-credit companies as a special group among the small and medium enterprises, they have made more and more contribution to the economic development in their business areas, such as financing, solving employment and many other aspects. However, compared with the creation of social value that the micro-credit companies have made, they are suffering the financing embarrassment. On the hand, endogenous financing is limited, on the other hand, the main financial institutions in our country can never provide enough loans to them. And they also have the problems such as risk on private lending, high cost, absence of the system. In recent years, in order to further resolve the financing bottleneck of small loan companies, our bond market have made innovations in terms of products, mechanisms and so on. On the basis of corporate bonds and other direct financing products, the National Development and Reform Commission had launched a collective bond of SME(stands for small and medium enterprise).And the National Association of Financial Market Institutional Investors(Abbreviation for NAFMII) also launched a collective note of SME and regional sets of collective note. Furthermore, the NAFMII has attempted to launch ABS(stands for asset-backed security) on micro-credit companies with the combination of regulatory guidelines issued by CSRC(stands for China Securities Regulatory Commission).During the current economic and financial system, a innovation on direct financing opens up a new financing channels to micro-credit companies undoubtedly.Since the introduction of micro-credit in China from 1994, it has experienced nearly a decade of development in our country, but the micro-credit companies still face more problems because of positioning ambiguity, identity loss, financing channels, fiscal and taxation policies, business objectives, profit margins, risk control and so on. They are facing a series of problems. Especially, financing bottleneck is the severely biggest problem to micro-credit companies because of limit on policy, market and other factors, the financing channels are restricted. Undoubtedly, the financing bottleneck problem has become one of the most important factors restricting the scale and the rapid development of micro-credit companies.The innovation and promotion of financing instruments on bond market have created a channel serving micro-credit companies although, but in the actual operation, they are facing a series of the problems as market barriers and poor liquidity. It’s less effective to solve the bottleneck on financing in reality, even it can never be promoted and popularized to more micro-credit companies. This paper tries to analyze the obstacles of micro-credit companies in the use of debt financing, and try to put forward the methods and suggestions from the aspects of institutional support, intermediary support, credit information and security of guarantee.